Brazil's Gafisa cancels stock sale on market slump

By IBT Staff Reporter On 07/14/09 AT 10:40 AM

Brazil's second-largest homebuilder, Gafisa SA, said on Monday it canceled plans to sell stock in a public offering, citing general market conditions.

Gafisa said last month it planned to raise as much as 700 million reais ($353.4 million) from the sale of new stock. The company was among several in Brazil in recent weeks that announced plans to sell shares, seeking to benefit from an increase in risk appetite by overseas investors and a surge in local stocks.

Offerings that had fizzled in 2008, gained steam the past weeks, with the sale of nearly 10 billion reais in shares since late June, including the record-setting IPO of credit card processing company VisaNet.

Companies including electricity distributor Light SA, food processor Perdigao SA and consumer goods company Hypermarcas SA have also filed to sell stock in the coming weeks.

Still, increased caution about a quick recovery to the global economic crisis pushed Brazilian stocks lower in six out of eight sessions in July. The benchmark Bovespa index .BVSP has lost nearly 8 percent since Gafisa fist announced plans to sell shares on June 2.

The company, in line with its business strategy, will continue to monitor capital markets in Brazil and abroad and, should market conditions the company deems adequate be present, it may tap such markets again, Gafisa said in a securities filing.